July 06, 2007

Bono's Red

Perhaps Bono was grouchy because his celebrity-laden "Red" campaign to
promote Western brands to finance begging bowls for Africa has spent $100
million on marketing and generated sales of only $18 million, according to a
recent report.

June 20, 2007

Public Housing Should Be Crap

So, I wandering through a graduate text on poverty ( as you do...Poverty and Discrimination, Kevin Lang.) and I come across this:

However, if government offers subsidized housing, people who have significant resources will prefer the higher-quality housing available at the market price to the lower-quality housing available at the subsidized price. In this way, government can put fewer resources into identifying who is really poor and may be more effective at targeting resources at the truly poor.

So council and other forms of social housing should intentionally be crap so as to make the best use of scarce resources.

June 19, 2007

Save the Children on Childhood Poverty

Save the Children has a report out on childhood poverty. Some snippets:

Given the multi-dimensional nature of poverty, its measurement should encompass a variety ofdimensions and not just income (Perry, 2002), since focusing solely on income may miss out importantaspects of what it means to be poor (Nolan and Whelan, 2005). Furthermore, it has been pointed outthat poverty measures based solely on income are often limited, given the difficulty in obtaining an accurate calculation of a household’s income and widespread misreporting of income by respondents in surveys. Material deprivation indicators should compensate to some extent for the misreporting of income, which is believed to be a particular problem at the lower end of the income distribution (Willitts, 2006).

Interesting, don't you think? We're no longer to define poverty as actually being poor. That is, not having a decent income is no longer to be the definition.

So, we are to move to indicators of material deprivation. Lots of fun can be had there. I think we'd all agree that someone without sufficient food (in the absence of someone spending the cash on drugs, booze or tabs I mean) poor, yes. But a colour TV? Car? New furniture? Dishwasher?

How about, not enough bedrooms that teenage children of different sexes need to share a bedroom? Yes, that is indeed one of the definitions of severe poverty here. I agree that it may well not be desirable but severe poverty or excessive fertility?

Nevertheless, our confidence in the use of the enforced lack approach in this study is strengthened by the fact that research evidence has not highlighted differential reporting of deprivation indicators by families with children – families tend not to differ much from the general population (Willitts, 2006).

Beg pardon? Families are entirely different from the general population. They've, err, got children.

This whole report is confusing me mightily. I wish I could work out how to get table 2.6 into this blog post. What it seems to be saying is that it is possible for a two parent one child family to not be in poverty on £132 a week (that's post housing costs) while it's possible for another to be in severe poverty on the same income ( both severe income poverty and severe deprivation).

Which, if true, leads one to the conclusion that it's what people are doing with the money they have, not the amount of money they have, which is the determinant of poverty or not.

OK then, fine. There are parents who are feckless wastrels and those who are not. I'm a little amused that Save the Children has devoted a whole report to this but there we go.

So, where does this leave the case that we must spend more to alleviate poverty?

June 11, 2007

Making Poverty Histo......

OK, so one of the things the Jeffrey Sachs initiative is trying to tell farmers in Africa is how to harvest and store hay. Mmmm hmm. It's a pretty basic technology, so why haven't they been doing it before?

It's hard for me to believe that no one has thought about cutting grass
and saving it. I'm sure they are uneducated but that's a pretty basic
idea for someone who lives off the land. Rather, it is probably very
difficult to save because of the lack of law and order, including the
ability to store things without theft, or have the right to then sell
them in a future drought (at, presumably, higher than-average prices).
Then again, if they really never have thought of cutting and saving
grass, they really have zero chance of becoming a modern society on
their own.

Larry Elliott on Doha

By no stretch of the imagination is what is on offer a development
round - it is the usual mercantilist stitch-up with the great powers
seeking to extract as many concessions as they can while giving the
bare minimum in return.

How can we still be having trade talks in which people act as if ignorant of the facts about trade?

The G8's approach to trade is harder to explain than its foot-dragging
on aid. This, after all, is a pretty rightwing bunch, steeped in the
orthodoxies of market economics. One article of faith is that free
trade is better than protectionism, and that if a country lowers its
tariffs to foreign importers but gets nothing in return, both parties
benefit. There's not been much evidence of this thinking in the Doha
round so far.

Institutionally the US has never really believed this and from the look of things nor does the EU. Which is part of the problem of course.

We should be starting from the plainest and most obvious result in all of trade theory: if we lower our tariffs, then we benefit. Even in theory (a theory I don't think applies in the real world) the exception to this is the infant industry argument and that doesn't apply to the already rich nations. So economic logic should be driving us to lower tariffs, without asking for reciprocation.

But that's not the way the talks go, sadly. As clear an example as you need of the fact that we are not ruled rationally.

May 25, 2007

Jeffrey Sachs on Development

A quite mind-boggling piece by Jeffrey Sachs here. The "extreme free-market ideology of the World Bank"?

What has he been smoking?

Worse, much worse, is his commenting upon the changes in Chinese agriculture, and their applicability to the African experience. Yes, roads, irrigation, fertilizer have all indeed made a difference. But he fails to mention (even to dismiss them) absolutely the most important changes in the Chinese system.

The reform of land tenure and the freeing of the price system. Without those two, all of the other things will have no effect.

May 17, 2007

David Morton on Mozambique

Mozambique lacks the resources or the will to properly dispose of the
hundreds of tons of deteriorating weaponry from a 16-year-long civil
war that officially ended in 1992.

Note that word, resources.

But, most importantly, all this talk about privatization and being on
the "right track" is very much beside the point. As Kaminski concedes,
one in six Mozambican adults is infected with HIV. "Appreciating the
change for the better takes some imagination," he writes. But you
cannot speak of "the change for the better" unless the discussion
starts with HIV. It's the only yardstick that matters in Mozambique,
and in the rest of southern Africa as well. Some 37,000 Mozambican
children contracted HIV in 2006, a jump of 60% over six years before.
Nearly four of every 10 adults in Beira, the country's second largest
city, are HIV-positive. Those are apocalyptic figures, however creative
your thinking.

Yes, there is indeed such a crisis, but what is it that will be needed to deal with it? Resources. So all that talk about privatization and being on the right track is the point, not beside it at all.

In the comments, MysticBear gives a very good potted history of the country (the accuracy I don't vouch for, I just rather liked it).

One thing is true though, one of the problems really was the nature of the colonial power, Portugal. You can argue whether they were there too long or not long enough but there was certainly no preparation for independence. From fighting vigorously (most especially in Angola) to buggering off home at the moment of the 1974 revolution back home was a turn on a sixpence. It's said that Mozambique was left with 33 university graduates at the moment of independence.

Now university graduates might not actually be necessary for the establishment of a decent economy but they certainly are if you're going to try and impose a Soviet style centralized one, run by the wise technocrats at the centre: rather presupposes the existence of said technocrats really.

May 06, 2007

Aid to Africa

An interesting statistic, don't you think?The productivity increase that resulted from $187 billion's worth of
aid going on "public investment" in 22 African countries between 1970
and 1994 is a very precise figure: zero. The Ajaojuta steel mill in
Nigeria helps to explain why so much produced so little. The Ajaojuta
project began in 1979. Nearly 30 years and more than $5 billion later,
it has yet to produce a single bar of steel.

And another:

To the objection that a huge portion of aid disappears into the pockets
of corrupt officials, Sachs's reply was that corruption is not Africa's
main problem. Yet capital flight from Africa increases in direct
proportion as aid to the continent goes up: $94 billion left
sub-Sarahan Africa for Swiss bank accounts in 2004. That amount leapt
to an incredible $150 billion in 2005.